What You Need to Know About Dr Pepper Snapple Group’s Earnings

Dr Pepper Snapple (NYSE: DPS) reported earnings before the opening bell on Wednesday. Here's what you need to know about the company's results.

Solid earnings growthThe beverage giant's first-quarter earnings came in at $0.78 per share, significantly higher than analysts' expectation of $0.59 per share. The company said productivity improvements and lower costs for ingredients boosted operating profit. Dr Pepper Snapple's first-quarter sales of $1.4 billion were up slightly from the year-ago quarter's $1.38 billion. Net sales increased 1% for the the three-month period. Shares of Dr Pepper Snapple Group were up nearly 5% in late trading Wednesday.

Weathering fizzling soda consumptionAmericans consume less soda than they did a decade ago, a growing problem for all soft drink manufacturers. Dr Pepper Snapple has tried to combat declining demand with mid-calorie beverage offerings, such as Dr Pepper TEN, and noncarbonated drinks. For the most recent quarter, sales volume of Dr Pepper TEN rose 1% from the year-ago period. In noncarbonated drinks, Hawaiian Punch fell 8% and Mott's declined 1%. The Snapple and Clamato brands rose 2% and 3%, respectively. Meanwhile, volume for the company's flagship Dr Pepper brand fell 4%, while 7UP was flat for the quarter. Geographically, Latin America enjoyed a 17% surge in net sales, due in part to the newly enacted sugar tax in Mexico.

Looking aheadFor full-year 2014, the company expects reported net sales to be flat to up 1% and core EPS to be in the $3.38 to $3.46 range. Packaging and ingredient costs are projected to decrease. Dr Pepper Snapple said it would return $375 million to $400 million to shareholders in 2014 through share repurchases. Its stock currently pays a thirst-quenching dividend yield of 3.1%.

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